The Effect of Incentives: The Problem of Collective Action

2021 ◽  
pp. 141-165
Author(s):  
Jason Brennan ◽  
William English ◽  
John Hasnas ◽  
Peter Jaworski
Keyword(s):  
Collective Action ◽  
Property Rights ◽  
Public Goods ◽  
Rent Seeking ◽  
The Rule Of Law ◽  
Firm Structure ◽  
Group Interest ◽  
Group Settings ◽  
Collective Action Problems ◽  
Group Members

Even if cooperating will make everyone better off, cooperation won’t happen if people lack certain kinds of knowledge and motivation. In group settings, individuals will often have incentives to promote their own interest at the expense of the group, either by exploiting others or by failing to contribute to public goods. There are two ways to overcome these “collective action” problems: (1) the incentives that individuals face can be changed so that individual and group interest no longer conflict, and/or (2) group members can embrace norms that enable them to exercise self-restraint and forego opportunities to get ahead at the expense of others. The rule of law, property rights, and proper firm structure can help overcome collective action problems. However, these same structures can also create new opportunities for rent seeking.

scholarly journals Toward a More Comprehensive Typology and Theoretical Foundations of the Logic of Collective Action

2005 ◽  
Vol 19 (2) ◽  
pp. 1-13
Author(s):  
Jongwon Choi
Keyword(s):  
Game Theory ◽  
Collective Action ◽  
Public Goods ◽  
Interest Groups ◽  
Collective Action Problems ◽  
Analytical Frameworks ◽  
Theoretical Foundations

Current theories on the logic of collective action have two problems in common. First, with some exceptions, authors are not very careful about specifying what kind of collective action or goods they are deal with. Secondly, current theories of interest groups have not been specific about the theoretical foundations on which their arguments are standing. Given these theoretical problems, this paper has three purposes. The purposes will be elaborated in three subsequent sections. section II will investigate a more comprehensive multi-dimensional typology of collective action problems. Section III will discuss the relevance of the theory of public goods and game theory to the analysis of collective action problems. In Section IV, by picking up two representative examples, we will demonstrate the conditions under which two major analytical frameworks can be best applied.

TAXES, GROWTH, EQUITY, AND WELFARE

2006 ◽  
Vol 23 (2) ◽  
pp. 53-72 ◽  
Author(s):  
Richard Vedder
Keyword(s):  
Economic Growth ◽  
Property Rights ◽  
Income Distribution ◽  
Private Sector ◽  
Public Goods ◽  
Rule Of Law ◽  
Market Forces ◽  
The Rule Of Law ◽  
Income Data ◽  
Global Reduction

The scholarly literature suggests high or increased tax burdens tend to reduce economic growth, lowering incomes. Some argue, however, that low taxes and high economic growth can have adverse income distribution consequences or can lead to utility-reducing under-consumption of needed public goods. Evidence is presented questioning those assertions. People seek happiness by moving, and tend to migrate to low tax areas. Moreover, there is little evidence that governmental expansion leads to truly greater equality. Appropriately measured, income equality is actually far greater than typically claimed. Moreover, income data suggest that the international equalization of incomes and global reduction of poverty largely reflect private sector activity, namely market forces working where the rule of law and strong protection of property rights prevails.

scholarly journals French Automobiles and the Chinese Boycotts of 2008: Politics Really Does Affect Commerce

2011 ◽  
Vol 11 (1) ◽  
Author(s):  
Canhui Hong ◽  
Wei-Min Hu ◽  
James E. Prieger ◽  
Dongming Zhu
Keyword(s):  
Collective Action ◽  
Public Goods ◽  
Economic Impact ◽  
Market Share ◽  
Chinese Consumers ◽  
Beijing Olympics ◽  
Level Data ◽  
Collective Action Problems ◽  
Triple Difference ◽  
Political Weapon

Abstract We explore the economic impact of boycotts of French automobiles in China during the time of the 2008 Beijing Olympics. Conditions were favorable for a boycott, enabling Chinese consumers to overcome the collective action problems that can prevent boycott success and other voluntary contributions to public goods. We use brand and model level data in a difference-in-difference specification to investigate the boycotts’ effects on sales. A robust pattern of large impacts emerges: sales of French automobile brands fell 25-33 percent or more. Consumers substituted mostly toward Chinese and other Asian cars. The sales of the French models did not experience similar relative sales declines in countries other than China—triple-difference estimates point toward even larger relative loss of market share in China. Our results provide evidence that commerce can be used as an effective political weapon.

The Geography of Inequality: How Land Use Regulation Produces Segregation

2020 ◽  
Vol 114 (2) ◽  
pp. 443-455 ◽  
Author(s):  
JESSICA TROUNSTINE
Keyword(s):  
Land Use ◽  
Collective Action ◽  
Public Goods ◽  
Metropolitan Area ◽  
Local Governments ◽  
Local Level ◽  
The United States ◽  
Local Public Goods ◽  
Land Use Regulations ◽  
Collective Action Problems

Public goods in the United States are largely funded and delivered at the local level. Local public goods are valuable, but their production requires overcoming several collective action problems including coordinating supply and minimizing congestion, free-riding, and peer effects. Land use regulations, promulgated by local governments, allow communities to solve the collective action problems inherent in the provision of local public goods and maintenance of property values. A consequence of these efforts is residential segregation between cities along racial lines. I provide evidence that more stringent land use regulations are supported by whiter communities and that they preserve racial homogeneity. First, I show that cities that were whiter than their metropolitan area in 1970 are more likely to have restrictive land use patterns in 2006. Then, relying on Federal Fair Housing Act lawsuits to generate changes in land use policy, I show that restrictive land use helps to explain metropolitan area segregation patterns over time. Finally, I draw on precinct level initiative elections from several California cities to show that whiter neighborhoods are more supportive of restricting development. These results strongly suggest that even facially race-neutral land use policies have contributed to racial segregation.

scholarly journals Collective Action Problems and Direct Democracy: An Analysis of Georgia’s 2010 Trauma Care Funding Amendment

Economies ◽  
2021 ◽  
Vol 9 (2) ◽  
pp. 65
Author(s):  
Joshua C. Hall ◽  
Jeremy Horpedahl ◽  
E. Frank Stephenson
Keyword(s):  
Collective Action ◽  
Trauma Care ◽  
Direct Democracy ◽  
Motor Vehicle ◽  
Free Riding ◽  
Rent Seeking ◽  
Constitutional Amendment ◽  
Trauma Centers ◽  
Collective Action Problems

In 2010, Georgians voted on a proposed constitutional amendment that would have increased motor vehicle licensing fees by USD 10 with the proceeds dedicated to maintaining and expanding the state’s trauma care centers. This paper examines voter support for the referendum across counties and finds (1) that counties located near trauma centers in neighboring states had significantly lower support for the amendment and (2) that counties already having trauma centers had higher support for the amendment. These results are, respectively, consistent with free-riding and rent-seeking on the part of voters.

scholarly journals Inequality, institutions, and cooperation

2020 ◽  
Author(s):  
Thomas Markussen ◽  
Smriti Sharma ◽  
Saurabh Singhal ◽  
Finn Tarp
Keyword(s):  
Collective Action ◽  
Public Goods ◽  
Large Scale ◽  
Indirect Costs ◽  
Local Institutions ◽  
Collective Action Problems ◽  
Negative Effect ◽  
Public Goods Experiment ◽  
Voluntary Cooperation

We examine the effects of randomly introduced economic inequality on voluntary cooperation, and whether this relationship is influenced by the quality of local institutions, as proxied by corruption. We use representative data from a large-scale lab-in-the-field public goods experiment with over 1,300 participants across rural Vietnam. Our results show that inequality adversely affects aggregate contributions, and this is on account of high endowment individuals contributing a significantly smaller share than those with low endowments. This negative effect of inequality on cooperation is exacerbated in high corruption environments. We find that corruption leads to more pessimistic beliefs about others’ contributions in heterogeneous groups, and this is an important mechanism explaining our results. In doing so, we highlight the indirect costs of corruption that are understudied in the literature. These findings have implications for public policies aimed at resolving local collective action problems.

Environmental Public Goods Not Securable by Markets or Networks

2018 ◽  
Vol 9 (2) ◽  
pp. 26-41
Author(s):  
John J. Davenport
Keyword(s):  
Civil Society ◽  
Collective Action ◽  
Public Goods ◽  
Environmental Problems ◽  
Civic Organizations ◽  
Collective Action Problems ◽  
Environmental Public Goods ◽  
Civil Society Networks ◽  
Roger Scruton

Roger Scruton and others argue that market-based approaches and voluntary civic organizations can solve many environmental problems. The author argues in response that there are significant limitations to quota systems and similar market fixes, while NGOs and civil society “networks” are not effective in overcoming certain kinds of collective action problems. Even when they work to some extent, network-based solutions such as certification schemes or charity ownership of lands may also cause new problems, such as trends towards excessive concentrations of power, unhealthy dependencies, and lack of choice about which groups act as guardians of our interests.

scholarly journals Competing for Loyalty: The Dynamics of Rallying Support

2017 ◽  
Vol 107 (10) ◽  
pp. 2990-3005 ◽  
Author(s):  
Matias Iaryczower ◽  
Santiago Oliveros
Keyword(s):  
Collective Action ◽  
Public Goods ◽  
Dynamic Problem ◽  
Vote Buying ◽  
Corporate Takeovers ◽  
Positive Externalities ◽  
Collective Action Problems ◽  
Public Bads

We consider a class of dynamic collective action problems in which either a single principal or two competing principals vie for the support of members of a group. We focus on the dynamic problem that emerges when agents negotiate and commit their support to principals sequentially. We show that competition reduces agents' welfare with public goods, or if and only if there are positive externalities on uncommitted agents, and increases agents' welfare with public bads. We apply the model to the study of corporate takeovers, vote buying, and exclusive deals. (JEL D42, D62, D72, D82, G34, H41)

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